Special Interests Look to Gain Most
by H. Sterling Burnett
June 05, 2005
The Atlanta Journal-Constitution
WASHINGTON - Congress should give American motorists a break at the pump in the pending energy bill, but special interests and legislators beholden to them are once again loading the bill down with pork barrel projects.
Ethanol is a prime case in point. Ethanol's advocates have long argued that increasing the amount of ethanol used in gasoline would be a boon to the economy, reduce our dependence on foreign oil and improve air quality.
Yet, more than two decades and tens of billions of dollars in subsidies, tax credits and fuel mandates have done little other than to further enrich Archer-Daniels Midland (ADM), the multibillion dollar agri-giant that produces more than 70 percent of the ethanol used in America. In return, ADM has been a major campaign contributor to key farm state legislators in both political parties.
The economic impact of ethanol subsidies is negative. One report by the U.S. Agriculture department determined that every $1 spent subsidizing ethanol costs consumers more than $4.
Every bushel of corn devoted to ethanol production leaves less for human consumption and animal feed - thus people pay more for corn, beef, poultry and pork than they would absent the subsidies. And prices for other goods are also higher since farmers, in pursuit of lucrative subsidies, devote more acreage to corn rather than other, unsubsidized, produce.
The clamor for increased use of ethanol also raises the specter of the current problems surrounding the use of MTBE, the EPA-sanctioned fuel additive that oil producers began blending with gasoline in the mid-1990s to meet stricter clean-air standards in high-smog areas like New York City, New England and Southern California.
Although not carcinogenic in humans, MTBE has caused huge problems recently because it oozes from leaky storage tanks and leeches rapidly into groundwater, contaminating local water supplies.
The EPA recently found that only 16 of 3,776 U.S. water systems suffered contamination, and most of the spills are in the final stages of cleanup. Despite that, the issue has attracted a swarm of personal-injury lawyers who are salivating about the prospect of asbestos-type multimillion dollar payoffs from MTBE cases.
Ethanol has similar drawbacks - ones that also could spark costly litigation. Because it absorbs water, ethanol cannot be shipped through existing pipelines used to transport unblended gasoline - the water it absorbs could separate, causing pipelines and fuel lines to freeze, and perhaps burst, during cold weather. The same problem will make engines run less efficiently in cold-climate areas.
Worse, most studies show that it takes more energy to produce and deliver a gallon of ethanol than the energy it produces - a net loss of energy. Imported fossil fuels are used to produce, distill and transport ethanol.
Thus, requiring that the United States use 5 billion to 8 billion gallons of ethanol - a mandate that Congress is currently considering - would mean burning more, not less, imported oil and natural gas.
Ethanol would likely disappear from the marketplace absent federal subsidies and mandates. Like so much of the pork Congress bestows upon special interests, ethanol is bad for the economy, bad for consumers and bad for the environment.
Corn deserves a place on the nation's dinner table for its nutritional value, but it doesn't belong in the gas tanks of millions of U.S. motor vehicles.